"I think you need medicine."

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And that will be the only correct translation here. 'Треба' is when someone needs something to do or to get somewhere. 'I need to go — мені треба іти', 'I need to get/go to the school — Мені треба (потрапити/іти) у школу'.
'Бути потрібним (комусь)' is when someone needs some thing. 'I need a pencil — мені потрібен олівець'.